ICICI Bank with 0.25 percentage point cut to 9.75 per cent was the most aggressive among the banks that announced slashing rates today.

"We have decided to reduce the base rate by 15 bps from 10 percent to 9.85 percent per annum and benchmark prime lending rate by 15 bps from 14.75 percent to 14.60 percent," State Bank of India (SBI) said in a statement.

SBI said its new rates will be effective April 10. Its Chairman Arundhanti Bhattacharya said other lenders should follow the move and lower their rates. She also hinted at lowering of deposit rates going forward.

Both SBI and ICICI Bank's new lending rates are effective from from April 10.

HDFC Bank reduced base rate 0.15 percentage point to 9.85 per cent which will come into effect from April 13.

The move came within hours of Reserve Bank Governor Raghuram Rajan blaming banks for not passing the benefits of two repo rate cuts to borrowers and termed as "nonsense" the lenders claim that cost of fund was still high.

"The banks marginal cost of funding (has) fallen, the notion that it hasn't fallen, is nonsense; it has fallen!" Rajan told reporters during the post policy meeting here today.

The Reserve Bank of India in its monetary policy review earlier in the day left repo rate unchanged at 7.5 per cent.

An HDFC Bank official said the decision to cut lending rate was taking in the Asset Liability Committee meeting held today after the monetary policy announcement.

The bank has also lowered fixed deposit rate by 0.25 per cent across various maturities. It has been brought down to 8.5 per cent from 8.75 per cent for maturity between 1-5 years in line with market.

The lowering the deposit rate provided headroom to pass on the benefit to the borrowers, the official said, adding, thus, the base rate was reduced by 0.15 per cent effective April 13.

HDFC Bank had last reduced the base rate to 10 per cent with effect from November 2, 2013.